Why You Shouldn’t Get Into Stock Trading

Dear fellow traders,

Indeed, one of the most growing industries in the past few decades is stock trading.

This is because trillions of income can be generated in one day through hundreds or even thousands of trading transactions that come in different parts of the country and now, the world, made possible through fast Internet access.

In fact — due to its viability — more and more people are getting into it because they see how flexible the trading schedule could be, how easy to get access to stock trading, the efficiency of the means and ways that stock trading can be transported, the no or low minimum of costs and accounts, and its capability to always move.

If you want to get into stock trading, the 1st thing that you need to do is to conduct some research. This research should include :
(1) what stock trading is,
(2) what are the basic things that you need to know in order to get started with it, and
(3) what do you need to do in order to be successful in it.

You can conduct your research by searching for websites that offer information on it. These include Yahoo! Finance, Google Finance, Marketwatch.com, MSN Money etc.

Today, with just one click, thousands of information could appear right in front of you. For you to save time, it would be best if you are very specific on what you are looking for. If you know what the exact terms that you are looking for, it would be easier for you to find the information you need regarding stock trading.

For a list of trading or finance related terms, visit :
http://www.investopedia.com/dictionary/

But, despite all these advantages, there are also reasons that you need to consider why you Should Not get into stock if given another option or business opportunity.

Experts say that people should not be very impulsive in getting into stock trading without really gathering their facts straight. This is because the investment involved in stock trading is not a joke. And once you lose a lot of money of investment, it will be hard to recover in that same industry.

If you have another business option that you think that you will succeed in, it will be best to try it first because stock trading can break your heart and your pocket once you get started the wrong way.

Experts say that people should not get into stock trading because :

There Is No Exchange System Available.
This is one the greatest risks that people who get into stock trading must face. Since it is a free flowing market with no definite time of operations, one can never be sure if they can close a transaction or not. If you are not comfortable with the idea that your business has no regulated mechanism, then don’t invest on it in the first place.

It Can Be Quite Complicated.
Compared to other markets, the nature of stock trading is much more complicated and harder to understand. Since it is quite different in terms of the approaches and techniques being used, some people easily get tired of getting the hang of it. Because of its complicated nature, it takes years for some traders to understand all the things that they need to understand about the process. Some may even refer to trading as an art.

It Has 2 Sides To Every Position.
Although it is the nature of a market to have more than one side position, the two-side position of stock trading can be confusing to most people. This is because the currencies that are being dealt with change rapidly and fluctuates unexpectedly compared to other markets.

But to me, I believe if you follow a good trading system and practise good money management, you have at least started off in the correct footing in your stock or option trading journey. Then, you would persevere and keep learning hands-on from your trading experiences to become better and better in your trading.

Yours Truly,

Tony Chai

Wall Street Falls Again

Dear fellow traders,

On Thursday, 10 March 2011, The Market Big 3, namely, the Dow Jones Industrial Average, the S&P 500 Index and the NASDAQ Composite Index suffered another big drop due to several negative news which might hit the US economy further.

On Thursday, 10 March 2011, the Labor Department announced that the number of people seeking unemployment benefits rose last week. Applications increased by 26,000 to a seasonally adjusted 397,000 during the week ended 5 March 2011.

The US government incurred the largest-ever budget deficit of $222.5 billion for the single month in February 2011. This eclipsed last February's record by nearly $2 billion. This ensures 2011's annual deficit to end as the biggest in U.S. history. The full-year deficit would exceed 2009's record deficit of $1.41 trillion.

The widening deficit is due to the impact of the tax-cut package that US President Barack Obama and congressional Republicans introduced in Dec, 2010.

Also, Oil prices have hovered around US$103 a barrel on Friday, 11 March 2011, in Asia as traders now worried that the protests in Saudi Arabia could escalate and might disrupt production in the world's largest crude exporter.

As of this writing, the Asian share markets extended their losses on Friday, 11 March 2011, following the Dow Jones Industrial Average's biggest one-day drop since August 2010. China has also reported that the country is experiencing high inflation, announcing that its February 2011 inflation remained elevated at 4.9%.

On Thursday, 10 March 2011, The Dow shed -228.48 points, or 1.87%, to 11,984.61; The S&P 500 dropped -24.91 points, or 1.89%, to 1,295.11 and the NASDAQ fell -50.7 points, or 1.84%, to 2,701.02. All 3 indexes have currently breached the 30 Day Moving Average once again.

I'm watching the stop loss level of my few bullish positions tightly. Seemed like the market bloodshed might continue on Friday, 11 March 2011.

Yours Truly,

Tony Chai

US Markets Fell on 1 March 2011

Dear fellow traders,

On 1 Mar 2011 (Tuesday), with rising unrest in Libya and Mr Ben Bernanke, Head of the Federal Reserve, announcing that rising energy prices will affect the economy, the main US market indexes all fell.

On 1 Mar 2011, The Dow Jones Industrial Average shredded 168 points, or -1.38%, to 12,058. The S & P 500 Index also dropped 22 points (-1.57%) to close at 1,306.33. The 30 day simple moving average (SMA) for both indexes have been tested again. If the drop persists, the next support will be the 50 day SMA. If you have bullish positions, it’s advisable that you have stop loss in place for your positions.

Yours truly,

Tony Chai

DOW breached 30 Day Moving Average

Fellow traders,

Thousands of foreigners have fled Libya amidst the political unrest & violence in the North African nation. On Wednesday, 23 Feb 2011, Crude oil prices reached US$100 a barrel in the United States due to the continued unstable situation in Libya - which is the 12th largest exporter of crude.

On Wednesday, 23 Feb 2011, the Dow Jones Industrial Average and the S&P 500 Index breached their 30 Day Moving Average for the 1st time since Nov 2010. There was a rebound on the moving average on Friday, 25 Feb 2011. Now we have to see whether this rebound will take strength next week.

Yours Truly,

Tony Chai

The Dow extended its winning streak

Dear fellow traders,

On 9 Feb 2011, the Dow Jones Industrial Average extended its winning streak of 8 consecutive up days to close at 12,239; this despite the protest at Egypt, started back in 25 Jan 2011, to force Egypt's President Hosni Mubarak to resign.

As of this writing (11 Feb 2011), Egypt's Vice President, Mr Suleiman, has announced that Mr Mubrarak has officially stepped down and a military council would be running the country's affair.

On 11 Feb 2011, the Dow Jones Industrial Average was up +43.97 points to close 12,273.26, a fresh 2 and a half year high. The NASDAQ was also up an impressive +18.99 points (0.63%) to close at a session high of 2,809.44.

The following is an update of my trades with the Star Trading System.

There were a few trades which were stopped out in Jan 2011. The trades were better going into Feb 2011 as I closed those positions which made big intra-day price movement. For instance, one of these companies won a suit and their stock price gapped up about +$1.70 at the opening, which presented a great opportunity to close the position.

Review of Star Trading System

Warmest Regards,

Tony Chai